A planned International Foundation meeting is expected to generate $40 million for the state
POSTED: 01:30 a.m. HST, Oct 19, 2010
The fate of Oahu's largest fall convention, which could potentially generate some $40 million in economic activity, hung in the balance yesterday as a five-day union worker strike at the Hilton Hawaiian Village came to a close along with related strikes in Chicago and San Francisco.
Unite Here Local 5 union workers, who walked off the job at the Hilton Hawaiian Village early Thursday, were to return to work after midnight last night. The 1,500 or so employees joined the strike as part of the national Hotel Workers Rising Campaign, which seeks to unite workers with similar bargaining goals.
Since union contracts at many hotels expired June 30, Local 5 workers in Hawaii have participated in a rally at Hilton Hawaiian Village, conducted a sit-down that closed off a portion of Kalakaua Avenue in front of the Hyatt Regency Waikiki Beach Resort & Spa, and held a one-day strike at the Hyatt.
Guest retention was the focus this week in Waikiki as hoteliers worked to ensure that the strike did not ruin vacations or business trips. Now that the strike has passed, the state must work to retain its fragile group business, which creates higher demand within the hotel industry, known as "compression," which leads to higher room rates.
The Wisconsin-based International Foundation of Employee Benefit Plans, which counts the International Brotherhood of Teamsters among its largest clients, has threatened to cancel its Nov. 14-17 conference in Honolulu if labor issues are not resolved.
The event, which has been on the books since 1986, would bring 28,000 room nights (the number of visitors times number of nights booked) to Hawaii hotels and 9,200 to Hilton Hawaiian Village alone, said Jerry Gibson, Hilton Hawaiian Village's area vice president and managing director, who along with Gov. Linda Lingle and other tourism officials was scrambling to preserve the booking.
"If you extrapolate the taxes and how many people the conference would put to work, it means a whole lot to the state," he said.
Lingle sent the group a letter on Friday, urging them not to cancel the conference and reassuring them that union activities would not disrupt their gathering. In her letter, Lingle said that she had spoken with Eric Gill, the financial secretary-treasurer of Local 5, and that he had assured her that the union would not engage in strikes, pickets or boycotts during the conference. However, union officials have said that Gill never promised not to strike.
The International Foundation could not be reached for comment yesterday.
Hilton, who spoke with the International Foundation last week, expects to resume discussions with the group today, Gibson said.
"We hope that in the end everything works out well for the entire city," he said.
If the conference pulls out, other hoteliers and members of Hawaii's visitor industry also will suffer, said David Lewin, general manager of the Hyatt Regency, which is holding 3,500 to 4,000 room nights for the International Foundation.
"It would be very unfortunate for the state, for the city and for all the workers because that business will not be replaced," Lewin said. "Hawaii, Waikiki specifically, would normally rely on Japan for those days, but because that convention is on the books, we've pushed away all the Japanese business and it will not be booked in the short term."
The foundation is not likely to come to Hawaii unless Local 5 offers it assurances and shares the progress that it has made with hoteliers during negotiations, Lewin said.
During the strike, Hilton hired 300 temporary workers and called in 150 managers to take over front desk duties, tote luggage, serve coffee and clean rooms, Gibson said. The state's largest hotel was forced to close six of its food and beverage outlets and temporarily curtailed valet parking and room service, he said.
"The biggest impact was on our guests," Gibson said. "The challenge now will be whether or not our guests were happy enough to come back. We tried very hard to provide an outstanding and seamless experience."
Although Billy and Katie Dale of Charlotte, N.C., said the strike did not hurt their honeymoon, other guests reported inconveniences.
Hilton gave $250 in credits and free breakfasts to Moran Mashiach and Zahi Livne of Tel Aviv, Israel, to appease their complaints that noise and lack of service dominated their stay. However, the couple, who got engaged during their trip, was still dissatisfied.
"You can spend $100 in five seconds at this resort," Mashiach said. "It doesn't make up for the thousands that we spent to get here or the 24-hour flight."
Hilton and Local 5 are slated to go back to the bargaining table Oct. 25 and 26, Gibson said. Hilton has offered workers raises as well as full pension and health benefits for their families, he said.
Kaleo Aarona, a Hilton Hawaiian Village reservationist who lost her voice while walking in the picket line, said Hilton has not offered workers a fair contract. Although Blackstone Group, the owner of Hilton Worldwide Inc., received $180 million in bailout funds and is one of Wall Street's largest private equity firms, it has cut jobs, refused to create needed jobs and demanded that workers give back, she said.
"They are making billions of dollars, but so far they've only offered us a nickel raise and they are trying to outsource everything from reservations to food and beverage," Aarona said.
In the second quarter of this year, Blackstone said its profit, excluding some costs tied to the firm's 2007 initial public offering, was $205 million.